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Thomas Cook dives deeper into hotels to improve margins

British travel company Thomas Cook has set up a £150 million (US$208 million) hotel fund as part of a plan to raise margins through new Thomas Cook-branded hotels, according to a Reuters report.

Thomas Cook, the company that pioneered the package holiday concept when it was set up in 1841, makes better margins from eponymous hotels that it owns and which tend to be higher-end and generate better customer loyalty.

While the company sends holidaymakers to about 3,000 hotels across in destinations from the Mediterranean to the Caribbean and elsewhere, only about 190 of the properties are Thomas Cook or Casa Cook branded. Of those, the company owns only four.

Thomas Cook formed a strategic partnership with Switzerland-based hotel development company LMEYInvestments in September and said on Wednesday that it was transferring two of the hotels it owns into the fund while its partner is transferring three hotels.

The fund’s first project, named Thomas Cook Hotel Investments, is development of a new “Casa Cook” hotel in Ibiza, and it will then look to add further properties.

Thomas Cook said in February that it was on course to meet annual profit forecasts, with recovering demand for holidays to Turkey helping to offset the impact of rising costs in Spain.

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